HL Deb 25 October 1972 vol 335 cc2146-53

2.47 p.m.

THE MINISTER OF STATE FOR NORTHERN IRELAND (LORD WINDLESHAM) rose to move, That the Draft Rates (Northern Ireland) Order 1972, laid before the House on August 9, be approved. The noble Lord said: My Lords, I am keenly aware that in asking your Lordships to approve the two draft Orders in Council this afternoon, dealing with rates and planning, there is a danger of appearing to be remote from the violent conflict that is all too evident in Northern Ireland. On a previous occasion of this kind I remember the noble Lord, Lord Wade, from the Liberal Benches, referring to the air of unreality which can pervade debates of this sort. In a sense, of course, this is so. But at the same time I believe we ought to acknowledge the absolutely essential need to keep the public administration in Northern Ireland going, and to keep it going as normally and as efficiently and as fairly as possible.

I might add that this is one of the factors that makes our present undertaking so demanding. First of all, there is the necessity to respond quickly, and often totally in terms of time, to the urgent needs of the security situation. But, simultaneously with this, there are the claims made by the administration of the basic public services—housing, education, the social services, local government—and the need to ensure that the ways these services are organised are in line with the requirements of those for whom they are provided. If, by their efforts, the terrorists caused the Government to shelve the second of these two responsibilities they would have achieved an objective more significant than many of them would realise

So for this reason, without in any way minimising the importance of the operations of the security forces against those who are seeking to get their own way by force or by threats of force, I am sure your Lordships will agree that we should at times, methodically and calmly, turn our minds to the kind of issues which are covered in the two draft Orders before us to-day. In moving these Orders I shall not speak at any great length, but I shall try wherever possible to explain the present law and practice in Northern Ireland; where it differs from that in the rest of the United Kingdom; and how it is being changed. Both the Orders before your Lordships to-day arise out of local government reorganisation in Northern Ireland. The first, as its title implies, concerns rates—the financial basis upon which local government rests. The draft Order consolidates the present law on rating and valuation and modifies it to provide for determining the level of rates and for their collection after the new local government structure becomes effective, and also for improvements in the system of valuation for rating.

The present situation in Northern Ireland is that rates are determined and collected by county councils, county boroughs, non-county boroughs and urban districts; and in the case of water rates the Belfast Water Commissioners determine and collect rates in their own area of supply. When local government is reorganised next year, all these bodies will disappear and their functions will be taken over either by Government Departments, or by other public bodies, or by the 26 new district councils. It is therefore proposed that, for the future, the Northern Ireland ratepayer should be asked to pay, first of all, a district rate towards district council expenses; and this will be determined independently by the council of the district in which he lives. Secondly, there will be what is described as a regional rate. This will be determined by the Northern Ireland Ministry of Finance and will be charged uniformly throughout the Province. It will take into account the fact that by far the largest part of present local authority expenditure (something of the order of 85 per cent.) will be borne directly or indirectly by central Government. In order to minimise inconvenience to the ratepayer and to make for greater administrative efficiency, both the district and the regional rates will be collected together by the Northern Ireland Ministry of Finance, which will then hand over to each district council the product of its own rate.

The present arrangements for paying rates in two parts with the option for domestic ratepayers of paying in monthly instalments will continue, and there is a provision for discounts for prompt payments. As some of your Lordships will know, similar provisions operate in Great Britain. An advantage of the centralised administration of rating is that it will remove the administrative difficulties which previously prevented the introduction in Northern Ireland of a rate rebate scheme on very much the same lines as the scheme which has operated in Great Britain since 1966, and Article 28 of this Order provides for such a scheme to take effect in Northern Ireland. Since the administration and collection of rates is to be organised centrally by the Ministry of Finance, it seems fair that ratepayers throughout the Province should enjoy the same terms for payment and the same discounts. It is therefore intended to use powers proposed in this draft Order to make transitional arrangements for the new rating system to phase out special discounts and reliefs given in Belfast and some other local areas. I believe that most of these are historical in origin, dating from the 1920s, and have little relevance to the ability of the occupier to pay rates on his property.

I turn now, my Lords, to valuation. The most important new proposal is the introduction of a continuous review of valuations on a basis similar to the system which operates in Great Britain. At present there is a system in Northern Ireland of annual revision, which means in most cases that there is a delay of anything from 9 to 21 months before the valuation of a property for rating can be changed. Under the new arrangements, this period should be reduced, on average, to something closer to three months. Apart from this, the only proposal for changing exemption from rates concerns accommodation which is provided by a charitable body to house persons, such as caretakers, teachers or clergy, who carry out the functions of the charity. Some recent cases in the courts have considerably widened the extent to which this sort of occupation can be regarded as charitable, and therefore exempt. This is not a problem peculiar to Northern Ireland; and there is a considerable difference at present, in that exemption in Northern Ireland means 100 per cent. exemption, whereas in Great Britain it means 50 per cent. exemption with an option for the rating authority to grant more. The Order before your Lordships proposes to move nearer to the position in Great Britain by creating a separate category for such property and providing for 50 per cent. exemption. An exact parallel will apply between the positions in Great Britain and Northern Ireland regarding clergymen's houses. These will in future obtain 50 per cent. exemption.

In conclusion, my Lords, I should say that the changes which I have outlined have been thoroughly discussed with representatives of local government and with other interested parties in Northern Ireland. They have been widely regarded as desirable in themselves; as a necessary part of the reform of local government; and as being in tune with much contemporary practice and thinking on local government finance in the rest of the United Kingdom. As such, I commend the draft Order to your Lordships. I beg to move.

Moved, That the Draft Rates (Northern Ireland) Order 1972, laid before the House on August 9, be approved.—(Lord Windlesham.)

LORD PARGITER

My Lords, I wonder whether the noble Lord could say what are the rates paid by a person resident in Northern Ireland on a typical property as compared with the rates paid by a person living in England.

2.58 p.m.

LORD SHACKLETON

My Lords, I expect the noble Lord will be replying to questions, and if I intervene now it will give him a little time, if he has not got an answer, to get it. I intend to intervene only very briefly, but my noble friend's question underlines once again the impossibility of this House dealing with these matters. We have said this before, but I am saying it again because I am sure some other noble Lord will say it if I do not. This is probably the fifth time that the noble Lord, Lord Windlesham, and I have agreed that the situation is totally unsatisfactory. He does his very best to help us. It is helpful that we have these explanatory memoranda available in the Printed Paper Office for us to read, but when I start to study this Order, as indeed is so in the case of the Order following it, I see that there are a number of subjects which many of my noble friends, like my noble friend Lord Pargiter, with experience of local government, would probably wish to debate at length; and it just is not possible because, in any case, this Order is not amendable. In a way, this will be relevant to the matters to be debated later this afternoon on the Motion of the noble Lord, Lord Alport, because this is an additional chore imposed on us: that the Parliament at Westminster has now taken on the duties of Stormont, while Stormont is busy taking on the duties of local government in Northern Ireland.

I think, therefore. there is little useful that I can say although there is so much that one would wish to say, both on this and on the following Order. No doubt in the new Session, when another place has decided how it is going to handle this sort of matter, we shall be able to face this problem ourselves, but until another place does that it is very difficult for us to do so. So I personally exculpate the noble Lord, Lord Windlesham, who has always been extremely co-operative. Everything we have asked for he has done his best to produce; and the papers are available in the Printed Paper Office for us to read. He referred to the remarks of the noble Lord, Lord Wade, last time; but here we are, stuck just as badly as before, with what really is a Bill of 57 clauses, or thereabouts, and a number of enormously long Schedules. My feeling is that it would be a pretence if we discussed it in detail. There may be particular points in which noble Lords are interested which, if raised, may help clarify certain aspects; but since there is little that we can do about it, I would prefer officially from these Benches not to pretend that we are giving it all the consideration that it should have. There may be some further points on the draft Planning Orders. That Order is perhaps a little more intelligible to me than this one; but I did not seek advice from my noble friends who know more about this because I thought—and the noble Lord, Lord Windlesham, would agree—that it would be a waste of time to do so. Certainly, so far as I am concerned, I recommend the House to approve this Order.

LORD WADE

My Lords, I too should like to thank the noble Lord for explaining these Orders, It was not my intention again to refer to the air of unreality. I recognise in present circumstances that the day-to-day business has to be carried on and that these Orders have to be laid. There is one point which I should like to raise with regard to rates. I hope that it is quite a simple one but it may be otherwise. Regrettably, a certain amount of property has been damaged or destroyed in Northern Ireland. What is the effect on other ratepayers where property is so damaged that rates can no longer be raised upon it? Does it have the effect of throwing an additional burden on to the other ratepayers, or is the burden borne by the Exchequer here? That is the only point that I have to raise. With regard to valuation, which is dealt with in the next Order, it seems to me that the proposals are an improvement.

3.4 p.m.

LORD WINDLESHAM

My Lords, I should like to thank both noble Lords for the welcome they have given to this Order, and to thank the noble Lord the Leader of the Opposition particularly for sparing us a detailed debate on local government finance in Northern Ireland. There are certain fundamental differences but, as I sought to explain in my opening speech, this Order is bringing rating practice much closer—though it is not always exactly parallel—to what takes place in the rest of the United Kingdom. The noble Lord, Lord Pargiter, asked about the level of rates paid in Northern Ireland compared with that paid by the occupier of a similar property in Great Britain. The guiding principle here is that of parity: parity of taxes and parity of local government taxation. This means that both the taxpayer and the ratepayer in Northern Ireland should bear a burden which is equitable by comparison with that of his counterpart in Great Britain. Parity applies to rates in the same way as to any other tax. The best means of achieving parity is to make a comparison with rate levels in regions of Great Britain which have a similar structure of household incomes, and then to strike a regional rate which allows for the fact that in Northern Ireland a district rate will also be payable. Therefore what will happen under the provisions contained in this Order is that comparable areas in Great Britain will be studied, and in order to get an approximately similar level of rating they will be treated as models for the regional rate in Northern Ireland.

As I mentioned in my opening remarks, the cost of local government services is met as to about 85 per cent. at the moment from central Government funds. Therefore the cost of compensation, which comes from central funds, would not in the main fall on ratepayers in any particular area. I might add that in certain city centres such as (I speak from memory), Belfast, Londonderry and Newry, which have been particularly damaged, a system of rate relief has been introduced recently by the Secretary of State to help the ratepayers who have suffered exceptional loss of business. They have been either exempted completely from payment of rates, or have been enabled to pay at a lower level. Local authorities—from my own knowledge of Belfast Corporation, for example—have tried to be flexible in not demanding prompt payment of rates in certain harsh cases where it has been difficult for ratepayers to pay. Sometimes they do not have funds to do so, when they are perhaps awaiting financial compensation under a claim which may be before the county court.

My Lords, that deals briefly with the points that have been raised. I do not know whether the noble Lord, Lord Pargiter, has something more to say.

LORD PARGITER

My Lords, I gather that to achieve parity for ratepayers requires an 85 per cent. grant in Northern Ireland as against an approximately 50 per cent. grant in Great Britain?

LORD WINDLESHAM

My Lords, I should not like to give an absolute reply on that point. The general picture that I find it helpful to have in mind—and it may be helpful for other noble Lords—is that around 85 per cent. of the cost of local government services in Northern Ireland is met by central Government funds—that is Stormont funds—and 15 per cent. by the ratepayers. The proportion of the 85 per cent. which comes from tax yield in Northern Ireland and the proportion which comes from tax payers in the rest of the United Kingdom is quite another calculation and one on which I should be very rash to give a quick answer to-day.

On Question, Motion agreed to.